MASTER CIRCULAR NO. 1/2004‑05, DATED 1.7‑2004
ISSUED BY FOREIGN EXCHANGE DEPARTMENT, RBI
Direct
investment by residents in Joint Venture (JV) and Wholly Owned Subsidiary (WOS)
abroad are being allowed, in terms of clause (a) of sub‑section (3) of
section 6 of the Foreign Exchange
Management Act, 1999, (42 of 1999) read with Notification No. GSR 450 (E),
dated May 3, 2000 and FEMA Notification 19/RB‑2000, dated May 3,2000 as
amended from time to time.
2. This
Master Circular consolidates the existing instructions on the subject of "Direct Investment by Residents
in Joint Venture (JV)/ Wholly Owned Subsidiary (WOS) abroad” at one place. The
list of underlying circulars/ notifications is set out at Annex 1.
3. As
recommended by the Committee on Procedures and Performance Audit on Public
Services (CPPAPS) (Chairman: Shri S, S. Tarapore) set up by the Reserve Bank,
this Master Circular is being issued with a sunset clause of one year. This
circular will stand withdrawn on July 1, 2005 and be replaced by an updated
Master Circular on the subject.
ANNEX I
FEMA
40/R13‑200I March 2, 2001,
FEMA 48/RB‑2002 January 1, 2002,
FEMA
49/RB,2002 January 19, 2002,
FFMA 53/RB‑2002 March 1,2002
FEMA 55/RB‑2002 March 7,2002
FEMA 99/RB‑2002 April 24, 2002
FEMA 88/RB‑2002 April 1, 2003
Sl. No. Circular
No. Dale
1. AP (DIR Series) Circular No. 3 June
22, 2000
2. AP (DIR Series) Circular No. 13 September
14, 2000
3. AP (DIR Series) Circular No. 32 April
28,2001
4. AP (DIR Series) Circular No. 16 December
15,2001
5. AP (DIR Series) Circular No. 18 December
18,2001
6. AP (DIR Series) Circular No. 23 February
19,2002
7. AP (DIR Series) Circular No. 27 March
2, 2002
8. AP (DIR Series) Circular No. 43 April
30, 2002
9. AP (DIR Series) Circular No. 51 June
24,2002
10. AP (DIR Series) Circular No. 58, December
2, 2002
11. AP (DIR Series) Circular No. 66 January
13, 2003
12. AP (DIR Series) circular ‑No. 68 January
13, 2003
13. AP (DIR Series) Circular No. 83 March
1, 2003
14. AP (DIR Series) Circular No. 96 April
28, 2003
15. AP (DIR Series) Circular No. 97 April
29, 2003
16. AP (DIR Series) Circular No. 104 May
31, 2003
17. AP (DIR Series) Circular No. 107 June
19,2003
18. AP (DIR Series) Circular No. 41 December
6,2003
19. AP (DIR Series) Circular No. 42 December
6,2003
20. AP (DIR Series) Circular No. 47 December
12, 2003
21. AP (DIR Series) Circular No. 57 January
13, 2004
22. AP (DIR Series) Circular No. 75 February
23, 2004
23. AP (DIR Series) Circular No. 90 May
3, 2004
Overseas
investments in Joint Ventures (JV) and Wholly Owned Subsidiaries (WOS) have
been recognised as important avenues for promoting global business by Indian
entrepreneurs in terms of foreign exchange earnings like dividend, royalty,
technical know‑how fee and other entitlements on such investments. They
are also a major source of increased exports of plant and machinery and goods
from India. Joint ventures have also been perceived as a medium of economic co‑operation
between India and other countries. Transfer of technology and skill, sharing of
results of R&D, access to wider global market, promotion of brand image,
generation of employment and utilisation of raw materials available in India
and in the host country are other significant benefits arising out of such
overseas investments.
In keeping
with the spirit of liberalisation, which has become the hallmark of economic
policy in general, and Foreign Exchange regulations in particular, the Reserve
Bank has been progressively relaxing its rules and simplifying the procedures
both for current account as well as capital account transactions.
Section 6
of the Foreign Exchange Management Act provides powers to the Reserve Bank to
specify, in consultation with the Central Government the classes of permissible
Capital Account transactions and limits upto which exchange is admissible for
such transactions. Section 6(3) of the aforesaid Act provides powers to the
Reserve Bank to prohibit, restrict or regulate various transactions referred to
in the sub‑clauses of that subsection, by making Regulations.
in
exercise of the above powers, the Reserve Bank has issued Foreign Exchange
Management (Transfer or issue of any Foreign Security) Regulations, 2000 vide Notification No. FEMA 19/RB‑2000
dated 3rd May, 2000 (as amended vide Notification
No. FEMA 40/RB‑2001, dated 2nd March 2001, FEMA 48/ RB‑2002 dated
1st January, 2002,FEMA49/2002‑RB, dated Jan. 19,2002,FEMA53/2002‑RB,
dated March 1, 2002, FEMA 55/2002‑RB, dated March 7,2002, FEMA 59/RB‑2002
dated 24th April, 2002) and FEMA 88/RB2002, dated April 1, 2003 (hereinafter
referred to as 'the Notification'). The Notification seeks to regulate
acquisition and transfer of a foreign security by a person resident in India i.e. investment by Indian entities in
overseas joint ventures and wholly owned subsidiaries as also investment by a
person resident in India in shares and securities issued outside India.
Indian
parties are prohibited from making investment in a foreign entity engaged in
real estate business or banking business.
(i) In terms of Regulation
4 of the Notification, general permission has been granted to residents for
purchase/ acquisition of securities and sale of shares/ securities so acquired
(a) out of
funds held in RFC account; and
(b) as bonus shares on existing
holding of foreign currency shares.
(ii) General permission has
also been granted to a person resident in India for purchase of securities out
of their foreign currency resources outside India as also for sale of
securities so acquired.
In terms
of Regulation 6 of the Notification, any Indian party has been permitted to
make investment in an overseas joint venture/wholly owned subsidiary by
submitting form ODA, duly completed to a designated branch of an authorised
dealer, upto 100% of the net worth of the Indian party as on the date of the
last audited balance sheet. Such investments in Nepal and Bhutan are permitted
only in Indian rupees. However, the automatic route facility is not available
for investment in Pakistan.
The above
ceiling will include contribution to the capital of the overseas JV/WOS, loan
granted to theJV/WOS, and 50% of guarantees issued to or on behalf of the
JV/WOS. Such investments are subject to the following conditions:
(a) The Indian party may extend
loan/guarantee to an overseas concern in which it has equity participation.
(b) The Indian party should not be on the Reserve Bank's
caution list or under investigation by the Enforcement Directorate or a
defaulter to the banking system in India whose name appears in the defaulter's
list published/ circulated by the Reserve Bank/CIBIL.
(c) All transactions
relating to a joint venture/wholly owned subsidiary should be routed through
one branch of an authorised dealer to be designated by the Indian party.
(d) In case of partial/full acquisition of an existing foreign company, where the investment is more than USD 5.00 mn, valuation of the shares of the company shall be made by a Category I Merchant Banker registered with SEBI or an investment Banker/ Merchant Banker outside India registered with the appropriate regulatory authority in the host country and in all other cases by a CA/CPA. However, in cases of investment by way of swap of shares, irrespective of the amount, in all cases valuation of the shares will have to be by a Category I Merchant Banker registered with SEBI or an Investment Banker outside India registered with the appropriate regulatory authority in the host country. Approval of FIPB will also be a precondition.
Investment
in an overseas JV/WOS may be funded out of one or more of the following
sources:
(i) Balances held in EEFC account of the
Indian party‑,
(ii) Drawal of foreign exchange from an authorised dealer in India including capitalisation of exports upto the extent of 100 per cent of the Indian party's net worth as on the date of the last audited balance sheet;
(iii) Utilisation of proceeds of foreign
currency funds raised through ADR/GDR issues,
(iv) Swap of shares, subject
to the valuation of the shares of the company by a Category I Merchant Bank
registered with SEBI or an Investment Banker/ Merchant Banker outside India
registered with the appropriate regulatory authority in the host country and
subject also to the condition that transaction has been approved by FIPB.
(v) Utilisation of proceeds of ECBs/ FCCBs.
However,
when such investments are in the financial sector they will be subject to
compliance of Regulation 7 of the Notification ibid
An Indian
party is permitted to make direct investment without any monetary limit out of
funds raised through ADRs/GDRs in terms of Regulation No. 6 (6) of the
Notification.
In terms
of Regulation 8 of the Notification, Indian parties engaged in any activity who
have already made an ADR/GDR issue, may acquire shares of foreign companies
engaged in & same core activity in exchange of ADRs/GDRs issued to the
latter in accordance with the scheme for issue of Foreign Currency Convertible
Bonds and Ordinary Shares (through Depository Receipt Mechanism) Scheme, 1993,
and the guidelines issued there under from time to time by the Central
Government, subject to compliance with the following conditions:
a. ADRs/GDRs are listed on any stock
exchange outside India;
b. such investment by the Indian
Party does not exceed the higher of the following amounts, namely:
i. amount equivalent of US$ 100 mn., or
ii. amount equivalent to
10 times the export earnings of the Indian Party during the preceding financial
year as reflected in its audited financial statements. For the purpose of
reckoning the limit, the investments already made under Regulation 6 in the
same financial year are to be included.
c. the ADR and/or GDR issue
for the purpose of acquisition is backed by underlying fresh equity shares
issued by the Indian Party;
d. the total holding in the
Indian entity by persons resident outside India in the expanded capital base,
after the new ADR and/or GDR issue, does not exceed the sectoral cap prescribed
under the relevant regulations for such investment;
e. valuation
of the shares of the foreign company, shall be
i. as per the
recommendations of the Investment Banker if the shares are not listed on any
stock exchange; or
ii based on the current
market capitalization of the foreign company arrived at on the basis of monthly
average price on any stock exchange abroad for the three months preceding the
month in which the acquisition is committed and over and above, the premium, if
any, as recommended by the Investment Banker in its due diligence report in
other cases.
The Indian
party is required to report such acquisition in form ODG to the Reserve Bank
within a period of 30 days from the date of the transaction.
Partnership
firms registered under the Indian Partnership Act, 1932 engaged in any bona fide business activity and having a
good track record are permitted to make investment in overseas JV/WOS abroad by
submitting form ODA to a designated branch of an authorised dealer provided
such investment does not exceed 100% of the net worth of the firm, subject to
the terms and conditions laid down in Regulation 6 of the Notification. Firms
wishing to take up financial services activities would however, have to satisfy
the additional requirements prescribed in Regulation 7 of the Notification.
Subject
the firm being eligible for overseas investment and subject also to the
condition that the entire funding for such investment is done by the firm, it
will be in order for individual partners to hold shares for and on behalf of
the firm in overseas JV/WOS if the host country regulations or operational
requirements warrant such holdings.
(i) Corporate ‑
Listed Indian companies are permitted to invest abroad in companies, (a) listed
on a recognized stock exchange and (b) which has the share holding of at least
10 per cent in an Indian company listed on a recognized stock exchange in India‑(as
on 1st January of the year of the investment). They are also permitted to
invest in rated bonds/fixed income securities of such companies. Such
investments shall not exceed 25 per cent of the Indian company's net worth as
on the date of latest audited balance sheet.
(ii) Individuals ‑ Resident individuals are
permitted to invest in equity and in rated bonds/fixed income securities of
overseas companies indicated at (i) above without any monetary limit.
(iii) Investment by Mutual Funds ‑ Mutual Funds are
permitted to invest in ADRs/GDRs of the Indian companies, rated debt
instruments, and also invest in equity of overseas companies indicated at (1)
above within an overall cap USD I billion. Accordingly, Mutual Funds desirous
of availing of this facility may approach SERI for necessary permission in the
matter. General permission is available to the above categories of investors
for sale of securities so acquired.
13.7 Approval of the Reserve Bank
In all
other cases of direct investment abroad which are not covered under the
previous paragraphs, the prior approval of the Reserve Bank would be required.
For this purpose, applications together with documents should be made in
(a) Form ODB if the investment is for acquiring shares of
foreign company engaged in the same core activity in exchange of ADR/GDRs
issued to the latter in excess of USD 100 mn or ten times the export earnings
(whichever is higher)/for acquisition of shares of a company outside India, in
lieu of fees due to it for professional services rendered to the said company.
(b) Form ODI
in all other cases.
Reserve
Bank, inter alia, would take into
account the following factors while considering such applications:
(a) Prima
facie viability of the Joint Venture/Wholly Owned Subsidiary
outside India;
(b) Contribution
to external trade and other benefits which will accrue to India through such
investment;
(c) Financial position and business track
record of the Indian Party and the foreign entity;
(d) Expertise and experience
of the Indian Party in the same or related line of activity of the Joint
Venture or Wholly Owned Subsidiary outside India.
In terms
of Regulation 7 of the Notification, an Indian party seeking to make investment
in an entity engaged in the financial sector should also fulfill the following
additional conditions:
(i) be registered with the appropriate
regulatory authority in India for conducting the financial sector activities;
(ii) earned net profit during the preceding
three financial years from the financial services activities;
(iii) has obtained approval
for investment in financial sector activities abroad from concerned regulatory
authorities in India and abroad; and
(iv) fulfilled the prudential
norms relating to capital adequacy as prescribed by the concerned regulatory
authority in India.
(a) Indian parties are also permitted to capitalise the
payments due from the foreign entity towards exports made to it, fees,
royalties or any other entitlements due from the foreign entity for supplying
technical know‑how, consultancy, managerial and other services within the
ceilings applicable. Export proceeds remaining unrealised beyond a period of six
months from the date of export will require the prior approval of the Reserve
Bank before capitalisation.
(b) Indian software
exporters are permitted to receive 25 per cent of the value of their exports to
an overseas software company in the form of shares without entering into Joint
Venture Agreements, with the approval of the Reserve Bank.
A JV/WOS
set up by the Indian party as per the Regulations may diversify its
activities/set up step down subsidiary alter the shareholding pattern in the
overseas entity subject to the Indian party reporting to the Reserve Bank, the
details of such decisions taken by the JV/WOS within 30 days of the approval of
those decisions by the competent authority concerned of such JV/WOS in terms of
local laws of the host country, and, include the same in the Annual Performance
Report required to be forwarded annually to the Reserve Bank.
An Indian
party may remit earnest money deposit or issue a bid bond guarantee for
acquisition of a foreign company through bidding and tender procedure and also
make subsequent remittances through an authorised dealer in accordance with the
provisions of Regulation 14 of the Notification.
An Indian
party which has made direct investment abroad is under obligation to (a)
receive shares certificate or any other document as an evidence of investment,
(b) repatriate to India the dues receivable from foreign entity and (c) submit
the documents /Annual Performance Report to the Reserve Bank, in accordance
with the provisions specified in Regulation 15 of the Notification.
An Indian
part), may transfer by way of sale to another Indian party, which complies with
the provisions of Regulation 6/Regulation 17B of the FEMA Notification 19/RB‑2000,
dated May 3, 2000 or to a person resident outside India, any share or security
held by it in a joint venture or wholly owned subsidiary outside India subject
to the conditions and reporting requirements indicated in A‑9 of Part 11
of this circular.
Indian
listed companies are however, permitted to disinvest in a JV/WOS abroad even in
cases where such dis-investment may result in a write‑off of the capital
invested to the extent of 10% of their previous year's export realisation.
An Indian
party, which does not satisfy the conditions laid down, and proposals which
seek "write off" of the investment, shall have to apply to the
Reserve Bank for prior permission.
An Indian
party may pledge the shares of JV/WOS to an authorised dealer or a financial
institution in India for availing of any credit facility for itself or for the
JV /WOS abroad in terms of Regulation 17 of the Notification.
Resident
entities having overseas direct investments are permitted to hedge the exchange
risk arising out of such investments. Authorised Dealers may enter into
forward/option contracts with residents who wish to hedge their overseas direct
investments (in equity and loan), subject to verification of such exposure and
provided further that the contracts are completed by delivery or rolled over on
the due date.
If a hedge
becomes naked in part or following to shrinking of the market value of the
overseas direct investment, the hedge may continue to the original maturity.
Rollovers on the due date are permitted upto the extent of market value as on
that date.
C.1 Permission for purchase/
acquisition of foreign securities in certain cases
General
permission has been granted to a person resident in India who is an individual
(a) to acquire foreign securities as a gift
from any person resident outside India; or
(h) to acquire shares under
Cashless Employees Stock Option Scheme issued by a company outside India,
provided it does not involve any remittance from India, or
(c) to acquire shares by way of inheritance
from a person whether resident in or outside India;
(d) to purchase equity
shares offered by a foreign company if he is an employee or a director of an
Indian office or branch of a foreign company or of a subsidiary in India of a
foreign company or an Indian company in which foreign equity holding is not
less than 51 per cent Authorised dealers are permitted to allow remittances for
purchase of shares by eligible persons under this provision.
(e) In all other cases,
which are not covered by general or special permission, approval of the Reserve
Bank is required to be obtained before acquisition of a foreign security.
The shares
acquired by persons resident in India in accordance with the provisions of
Foreign Exchange Management Act, 1999 or Rules or Regulations made thereunder
are allowed to be pledged for obtaining credit facilities in India from an
authorised dealer.
Residents
are permitted to acquire foreign securities, if it represents
(a) qualification shares for
becoming a director of a company outside India provided it does not exceed I of
the paid up capital of the overseas company and the consideration for the
acquisition does not exceed USD 20,000 in a calendar year.
(b) rights shares provided
that the right shares are being issued by virtue of holding shares in
accordance with the provisions of law for the time being in force.
(c) purchase of shares of a
JV/WOS abroad of the Indian promoter company by the employees/directors of
Indian promoter company which is engaged in the field of software where the
consideration for purchase does not exceed US 10,000 or its equivalent per
employee in a block of five calendar years; the shares so acquired do not
exceed 596 of the paid‑up capital of the Joint Venture or Wholly Owned
Subsidiary outside India; and after allotment of such shares, the percentage of
shares held by the Indian promoter company, together with shares allotted to
its employees is not less than the percentage of shares held by the Indian
promoter company prior to such allotment.
(d) purchase of foreign securities under ADR/GDR linked
stock option schemes by resident employees of Indian software companies
including working directors provided purchase consideration does not exceed US$
50,000 or its equivalent in a block of five calendar years.
Authorised
dealers may designate select branches at different centers to undertake foreign
exchange transactions in connection with overseas direct investment under
Regulation 6 or 17B of the Notification.
Authorised
dealers may allow investments upto the permissible limits on receipt of
application, in form ODA together with form A‑2, duly filled in, from the
Indian party/parties making investments in a JV/WOS abroad subject to their
complying with the conditions specified in Regulation 6 or 17B of Notification
FEMA No.1 9/RB2000, dated 3rd May 2000 as applicable. Investment in financial
services should however comply with additional norms stipulated at Regulation 7
ibid. While forwarding report of
remittance in respect of investment in. Financial Sector authorised dealers may
certify that approval from Regulatory authorities in India and abroad have been
obtained. Before allowing the remittance authorised dealers are required to
ensure that the necessary documents, as prescribed in form ODA, have been
submitted. Form ODA and other documents need not be submitted to the Reserve
Bank.
(i) Immediately after
effecting the remittance, the authorised dealers are required to forward a
report on remittance in the revised form ODR, in duplicate (format enclosed) to
the Chief General Manager, Foreign Exchange Department, Overseas Investment
Division, 3rd floor, Amar Building., Mumbai ‑ 400 001. Authorised Dealers
may ensure that the remittances on account of investments by Partnership firm
are reported with the superscription "Remittance by partnership firm under
Regulation 17B", in form ODR. In cases where the investment is being made
jointly by more than one Indian party, form ODA is required ;to be signed
jointly by all the investing parties and submitted to the designated branch of
the Authorised Dealer. Authorised dealer may forward to the Reserve Bank a
consolidated form ODR indicating details of each party. The same procedure may
be followed where the investment is made out of the proceeds of ADR/GDR issues
of Indian party in terms of Regulation 6(6) of the Notification.
(ii) Clause (vi) of sub‑regulation (2) of Regulation
6 provides that all transactions relating to investment in a JV/WOS are to be
routed through only one designated branch of an authorised dealer designated by
the Indian party. For proper follow‑up, the authorised dealers are
required to maintain party‑wise record in respect of each JV/WOS
separately.
(iii) Authorised Dealers may
allow remittance towards loan to the JV/WOS and/or issue guarantee to/on behalf
of the JV/WOS abroad after ensuring that the Indian party has a equity stake in
the JV/WOS.
In terms
of Regulation 11, Indian parties are permitted to make direct investment in
JV/WOS abroad by way of capitalisation of exports or other dues /entitlements
like royalties, technical know‑how fees, consultancy fees, etc. In such
cases also, the Indian party is required to submit details of the
capitalisation in form ODA to the designated branch of authorised dealer. Such
investments by way of capitalisation are also to be reckoned while computing
the cap of 100 per cent prescribed in terms of Regulation 6. Further, in cases
where the export proceeds are being capitalised in accordance with the
provisions of Regulation 11, the authorised dealers are required to obtain a
custom certified copy of the invoice as required under Regulation 12(2) and
forward it to the Reserve Bank together with revised form ODR. Capitalisation
of export proceeds or other entitlements, which are overdue, would require
prior approval of the Reserve Bank for which the Indian parties should file an
application in form ODI to the Reserve Bank for consideration.
On receipt of the form ODR from the authorised dealer, the Reserve Bank will allot an unique identification number to each JV or WOS abroad, which is required to be quoted in all the future correspondence by the Authorised Dealer or the Indian party with the Reserve Bank. Authorised Dealers may allow additional investment in an existing overseas concern set up by an Indian party, in terms of Regulation 6 or 17B only after the Reserve Bank has allotted necessary identification number to the overseas project.
In the
case of investment by way of share swap, Authorised Dealers are additionally
required to submit to the Reserve Bank the details of transactions such as
number of shares received/ allotted, premium paid/received, brokerage
paid/received etc., and also confirmation to the effect that the inward leg of
transaction has been approved by F1PB and the valuation has been done as per
laid‑down procedure and that the overseas company's shares are issued
/transferred in the name of the Indian investing company. Authorised Dealers
may also obtain from the applicants an undertaking to the effect that future
sale/transfer of shares so acquired by Non‑ Residents in the Indian
company shall be in accordance with the provisions of Notification No. FEMA
20/2000RB, dated May 3,2000 as amended from time to time.
In terms
of Regulation 9 ' in certain cases investment in JV/WOS requires prior approval
of the Reserve Bank. Authorised Dealers may allow remittances under these
specific approvals granted by Reserve Bank and report the same to the Chief
General Manager, Foreign Exchange Department, Central Office, Overseas
Investment Division, Amar Building, 3 rd floor, Mumbai 400 001 in the form ODR.
In terms
of Regulation 17A, partnership firms not eligible under Regulation 17B may make
overseas investment by obtaining the specific approval of the Reserve Bank.
Authoiised Dealer may allow remittances for overseas investments by registered
partnership firms in accordance with such approvals granted by the Reserve Bank
and report the same to the Chief General Manager, Foreign Exchange Department,
Central Office, Overseas Investment Division, Amar Building, 3rd floor, Mumbai
400 001 in form ODR with a superscription" Remittance by partnership firm
under Regulation 17A".
(i) In terms of Regulation
14 of the Notification Authorised Dealers may, on being approached by an Indian
party which is eligible for investment under Regulation 6, allow remittance
towards Earnest Money Deposit (EMD) to the extent eligible after obtaining Form
A2 duly filled in or may issue bid bond guarantee on their behalf f or
participation in bidding or tender procedure for acquisition of a company
incorporated outside India. On winning the bid, Authorised Dealers may remit
the acquisition value after obtaining Form A2 duly filled in and report such
remittance (including the amount initially remitted towards EMD) to the Chief
General Manager, Foreign Exchange Department, Central Office, Overseas
Investment Division, Amar Building, 3rd floor, Mumbai 400 001 in form ODR.
Authoriscd Dealers while permitting remittance towards EMD should advise the
Indian party that in case they are not successful in the bid, they should
ensure that the amount remitted is repatriated in accordance with Foreign
Exchange Management (Realisation, Repatriation & Surrender of Foreign
Exchange) Regulations, 2000 (cf. Notification No. FEMA 9/2000‑RB, dated
3rd May 2000).
(ii) In cases where an
Indian party, after being successful in the bid/tender decides not to proceed
further with the investment, Authorised Dealers should submit details of '
remittance allowed towards EMD/ invoked bid bond guarantee in form ODR to the
Chief General Manager, Foreign Exchange Department, Central Office, Overseas
Investment Division, Amar Building, 3rd floor, Mumbai 400 001.
(iii) In case the Indian
party is successful in the bid, but the terms and conditions of acquisition of
a company outside India are not in conformity with the provisions of
Regulations in Part I of different from those for which Approval under sub‑regulation
(3) was obtained, the Indian party should obtain approval from the Reserve by
submitting form ODI.
1. Terms
and conditions governing transfer by way of sale of shares of a JV/WOS outside
India:
(i) the sale is to be
effected through a stock exchange where the shares of the overseas joint
venture or 'Wholly owned subsidiary are listed;
(ii) if the shares are not
listed on the stock exchange, and the dis-investment is by private arrangement
the sale price of the share is not less than the value certified by a Chartered
Accountant/ Certified Public Accountant/ Category I Merchant Bank registered
with SEBI;
(iii) the Indian promoter
does not have any outstanding dues by way of dividend, technical know‑how
fees, royalty, consultancy, commission or other entitlements, and/or export
proceeds from the joint venture or wholly owned subsidiary;
(iv) the overseas concern
has been in operation for at least one full year and the annual performance
report together with the audited accounts for that year has been submitted to
!he Reserve Bank;
(v) the Indian party is not under
investigation by CBI/ED/SEBI/IRDA or any other regulatory authority in India;
Sale
proceeds of shares /securities shall be repatriated to India immediately on
receipt thereof and in any case not later than 90 days from the date of sale of
the shares/ securities.
2.
Authorised Dealers may obtain following documents in order to process an
application for dis-investment from an Indian party having JV/WOS abroad (these
documents may be retained with the Authorised Dealer and not forwarded to RB1.)
(i) Latest Annual Performance Report on the
working of the JV/WOS including financial statements.
(ii) Certified true copy of
the Board Resolution approving the dis-investment and indicating the amount of
dis-investment approved.
(iii) Letter of offer from the purchaser.
(iv) Consent letter from the partners in case
of dis-investment of share in a JV abroad.
(v) Valuation certificate.
(vi) Certificate from a
Chartered Accountant certifying that no dues are out standing to the Indian
party or indicating the details of dues, if any, from the JV/WOS to the Indian
party.
3.
Authorised Dealers will forward only a report regarding dis-investment to the
Regional Off ice of the Reserve, inter
alia, should indicate the following:
(i)
Identification Number.
(ii) Name
of Indian company.
(iii) Name
of the country and amount of investment approved.
(iv)
Amount of dis-investment.
(v) Date
of repatriation of the dis-investment proceeds.
(vi)
Certificate that all documents as above have been obtained.
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(Name and address of the authorised dealer) |
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Date of receipt: |
Inward No. |
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Identification No. |
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[All
amounts in Foreign Currency (FC) and Indian Rupees JNR), should be in thousand
only)
1. General
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Nature and category of the
investment [Please tick(? )the appropriate box]: |
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A. Fresh Proposal |
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B. Supplementary Proposal |
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(i) Participation in JV abroad |
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(a)(i) Enhancement of equity in
existing JV/WOS abroad |
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(ii) Contribution in WOS |
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(ii) Grant /enhancement of loan
in existing JV/WOS |
|
|
(iii) Full/partial' take over of
an existing foreign concern |
|
(iii) Extension/ enhancement of
guarantee |
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(iv) Acquisition of a company
overseas through bidding or tender procedure |
|
(iv) Others (Please specify) |
|
('Strike
out whichever is not applicable)
2 ‑
Particulars of Indian party
|
(a) Name and Address of the
Indian party |
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Tel. No. |
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Fax No. Email ID |
|
(b) Date
of incorporation (c) Status*
*(a)
Public Ltd. Company (1), (b) Private Limited Company (2)
(c) Public
Sector Undertaking (3), (a) Others (4) (Please specify)
|
(d) Name of the Industrial
House/Group to which the Indian party belongs |
|
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(e)(t) Existing line of activity
of the Indian party (Please tick the appropriate box) |
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(it) Brief particulars of the
products manufactured/goods traded/services rendered |
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Manufacturing |
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Trading |
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Financial Services |
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Non-Financial Services |
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Others (please specify) |
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(f) Years
of experience in the existing line of activity
(g)
Financial details for the last three years (Amount
in INR)
|
Financial Year ending |
Domestic Sales /turn-over |
Foreign exchange earnings from exports (excluding equity exports to existing JV/WOS) |
Foreign exchange Earnings (other than exports) |
Net profit (Loss) |
Paid-up capital |
Net worth |
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(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
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(h)
Particulars of EEFC Account (Amount in
FCY)
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Account No |
Balance as on |
Name of the Bank/Branch |
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(i) Particulars of ADR / GDR funds raised
(applicable only where the proposed investment is funded fully /partly out of
ADR/GDR funds (Amount in FCY)
|
(i) Date of issue |
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(iv) Amount utilised so far |
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(it) Amount issued |
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(v) Out of (h) above, amount
utilized for overseas investments |
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(iii) Issue Price |
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(vi) Balance available (Please
indicate where the funds have been parked) |
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III ‑
Particulars of the foreign partner/concern
|
(a) Date of incorporation: |
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D |
D |
M |
M |
Y |
Y |
Y |
Y |
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(b) Name/Address of the foreign
partner/concern |
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Tel. No |
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Fax No. |
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Email ID |
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(c) Years of experience in the
proposed field of collaboration: |
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d) Financial details during the last three years: |
|||||||||
(Amount in
FCY)
|
Accounting year ending |
Sales turnover |
Net fixed assets |
Net Profits (loss) |
Paid-up capital |
Net worth |
Dividend N |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
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IV. Particulars of JV/WOS
|
(i) Line of activity of the
proposed JV/WOS (Please tick the appropriate box) |
(ii) Brief particulars of the
products manufactured/goods traded services rendered |
|
(a) Manufacturing |
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(b) Trading |
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(c) Financial Services |
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(d) Non-financial services |
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(e) Others (Please specify) (iii) Location (country) of the proposed JV/WOS: |
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(iv) Time-frame fm project
implementation of the project: |
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(v) Accounting year followed in
host country : |
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V. Financial Package (Amount in
FCY)
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(a) Estimated cost of the
project of which |
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(i) Cost of capital equipment |
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(it) Cost of land |
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(in) Cost of civil works |
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(iv) Cost of misc. fixed assets |
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(v) Preliminary &
pre-operative expenses |
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(VI) contingencies |
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(vu) Others (Please specify |
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Total* |
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(b) Equitv share capital of the JV/WOS |
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(i) By the Indian party |
% to total equity |
(a) By foreign collaborator |
% to total equity |
*Where the
investment is for partial/full take over of an existing foreign concern, the
total cost of acquisition may be furnished. A certificate from a Chartered
Accountant about reasonableness of the acquisition price should be enclosed.
(c) Debt Finance
(Amount in
FCY)
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Amount |
Period |
Rate ol Interest |
|||||
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TL |
WC |
TL |
WC |
TL |
WC |
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(i) By Indian Party |
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(ii) By the Foreign Partner |
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(iii) By banks/ FIs in India |
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(iv) By banks/FIs abroad |
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Total |
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TL = Term Loan ** WC = Working
Capital |
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[V(a) should tally with the sum
of equity and term loan as given at (b)
and (c)) above |
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(Amount in FCY) |
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(d)Guarantees/ other contingent
liabilities |
Amount |
Period |
Remittance towards invoked guarantee |
|||||
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(i) By Indian Party |
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(it) By Foreign Partner |
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(iii) By banks/FIs in India |
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(iv) By banks abroad |
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VI. Method of Contribution by
Indian Party |
(Amount
in FCY) |
|
(i) Foreign Exchange from the
Market |
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(ii) Out of EEFC Balances |
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(iii) Out of ADR/GDR proceeds |
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(iv) Capitalisation of Export
proceeds |
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(v) Capitalisation of other dues
(please specify) |
|
VII.
Profitability Projections of the overseas JV/WOS (Amount
in FCY)
|
Years of
operation |
||||||
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1 |
2 |
3 |
4 |
5 |
Total |
|
(a) Gross sales/turnover |
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(b) Net Profit(Loss) |
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(c) Dividend |
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(d) Net worth |
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VIII. Projected repatriable entitlements, if any (Amount
in FCY)
|
Years of
operation |
||||||
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1 |
2 |
3 |
4 |
5 |
Total |
|
(a) Dividend (b) Others (Please specify) |
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Total |
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IX.
Projected non‑equity exports (Amount
in INR),
|
Years of
operation |
||||||
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|
1 |
2 |
3 |
4 |
5 |
Total |
|
FOB Value |
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We hereby
certify that (i) the information furnished above are true and correct,
(ii) all
the legal and other formalities in India and the host country for the above
investment have been/will be complied with,
(iii) the amount of investment by way of equity/loan and 50% of the guarantee, either out of market purchase of foreign exchange or the balances held in the EEFC account, utilisation of ADR/GDR proceeds, capitalisation of exports/other entitlements is within the limit of US$ 100.00 mn. on an annual basis, as per extant regulations and
(iv) no
investigations by Directorate‑of Enforcement are pending against us and
(y) our name is not in the Exporters' Caution List of the Reserve Bank/list of
defaulters to the Banking system circulated by the RBI, or under investigation
by the Enforcement Directorate/ SEBI IRDA etc. . .
Place: (Signature
of authorised official)
Date : STAMP/SEAL Name:
Designation
List of
enclosures
1. 4.
2. 5.
3. 6.
It is
certified that the terms and conditions contained in FEMA Notification 19/RB‑2000,
dated May 3, 2000 as amended from time to time (Foreign Exchange Management
(Transfer & Issue of Foreign Securities) Regulations, 2000) have been
complied with by the Indian party in respect of the investment under report. In
particular, it is further certified that‑ (t) the investment is not in
real estate oriented or banking business, and (ii)* the amount of foreign
exchange proposed to be purchased for remittance towards the investment
together with remittances already made and exports and other dues capitalised
for investment abroad during the current financial year under the Automatic
Route is/will be within 100 9o of the net worth of the Indian party as on the
date of last audited balance sheet, (iii)‑that the Indian party has (a)
has made net profits during preceding three years, (b) has fulfilled the
prudential norms of capital adequacy as prescribed by the concerned regulatory
authority; (c) has been registered with the appropriate regulatory authority in
India and (d) has obtained approval for investment in financial sector activities
abroad from the concerned regulatory authorities in India and abroad (vi)***
proceeds of ADR/GDR being used for the investment is within 100 % of the amount
raised abroad by way of ADR/GDR issues.
*Applicable
if investment in part or full is funded out of purchase of foreign exchange
from market and/or capitalisation of exports and other dues.
**Applicable
only in cases where the investment is in the financial services sector (e.g.
insurance, mutual fund, asset management, etc.)
***Applicable
where investment is funded, in part or full, out of ADR/GDR proceeds.
1. This
form in duplicate, should be submitted to the authorised dealer for the purpose
of making remittance.
2. The
form should be complete in all respects and accompanied by
(i)
certificate from the statutory auditors in the format given in the form, and
(it)
certified copy of the resolution of the Board of Directors approving the
investment.
In respect
of supplementary proposals involving additional equity, loan or guarantee, the
particulars furnished in form ODA submitted earlier in respect of the same
JV/WOS need not be insisted upon; however, revised particulars of the
repatriablc entitlements etc., to the extent applicable, may only be obtained.
3. Where
there is more than one Indian party making investment in the same JV/WOS
overseas, form ODA should be obtained by all the Indian parties jointly along
with a certificate (s) from other ADs, if remittances are effected by the
latter.
4. In case
where the Indian party is successful in the bid for overseas acquisitions for
which it has already made remittance towards Earnest Money Deposit or issued
bid bond guarantee, under a bidding or tender procedure, while effecting the
final remittance towards such acquisition, a report in the form ODA may be
obtained.
|
(i) Name and address of the Indian Company |
: |
|
|
(ii) Status of Indian Company [public limited company, private
limited company, public sector undertaking or others (please specify)] |
: |
|
|
(iii) Name of the Industrial Group/House to which the applicant
company belongs |
: |
|
|
(iv) Date of incorporation |
: |
|
|
(v) Existing line(s) of activity
(activities) |
: |
|
|
(vi) Financial particulars of the Indian company for the last
three years. |
: |
|
(Rs. in crores)
|
Financial year ended |
Domestic Sales |
Forex earnings by way of exports |
Forex earnings(other than export of goods/services) |
Net Profits (Loss) |
Paid up capital |
Net worth |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
|
|
|
|
|
|
|
|
(vii) Particulars of the
existing overseas JV/WOS set up/acquired by the applicant company and its
operational details'f or the last three years.
(Amount in foreign currency/million)
|
Name of the overseas concern and its location |
Approval No. issued by RBI |
Name of foreign Currency |
Amount of Investment |
||
|
|
|
|
Equity |
Loan |
Guarantee |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
|
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|
|
|
|
|
|
Average annual turnover |
Amount repatriated to India |
Prof it(loss) during the last year |
Net worth as per the last balance sheet |
||
|
|
Dividend |
Other entitlements |
Exports realised |
|
|
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|
(viii) Amount of blanket appf6v‑al limit
being sought for and the justification therefor.
(Please
see the instructions)
(ix) If the applicant
company or its sister concern /promoters /directors are under Exporters'
Caution List of the Reserve Bank or their affairs are under investigation by
Directorate of Enforcement /other law enforcing agencies, the brief particulars
thereof and the present position may be indicated here.
It is
hereby certified that the information furnished above‑is true and
correct. It is further certified that all the legal and other regulations
/requirements in India and the host Country of acquisitions will be complied
with when the transactions for the acquisitions are put through after obtaining
necessary approval from the Reserve Bank.
Place: (Signature
of authorised official)
Date : STAMP/SEAL Name:
Designation
List of
enclosures
1. 4.
2. 5.
3. 6.
Instructions for
filling up the form ODB
1. The
form complete in all respects should be submitted in triplicate to the Chief
General Manager, Reserve Bank of India, Foreign Exchange Department, Central
Office, Overseas Investment Department, Amar Building, Mumbai ‑ 400 001.
2. For
foreign currency SWIFT codes may be used.
3. If any
specific acquisition deal has been negotiated, the details thereof including
the name of the overseas company being acquired, its performance for the last
three years, share exchange ratio, acquisition price, valuation report.
4. A brief
write‑up incorporating, inter alia,
the tentative business plan of overseas acquisitions, country of location
of such foreign companies and their line of activity and financial and
operational particulars, rough estimates of acquisition cost and the basis
thereof, likely benefits to the applicant company and the country from such
acquisitions, such as, synergy between operations, dividend and other inflows,
access to technology, incremental exports, etc. should be enclosed to this
form. The information furnished will be kept confidential. 5. A note indicating
likely benefits to the acquiring company may also be furnished as an Annexure,
For Office
Use.
Date of
Receipt:
Approval
No.:
1. General
(a) Name and address of the Indian
Company ...........................................................
...........................................................
...........................................................
...........................................................
(b) Date
of Incorporation ...........................................................
D
D M M Y Y Y Y
(c)Line of
activity (activities) ...........................................................
...........................................................
...........................................................
(d) Financial details of the Indian company
for the last three years
(Rs. in crores)
|
Financial year ended |
Domestic Sales |
Forex earnings by way of exports |
Forex earnings(other than export of goods/services) |
Net Profits (Loss) |
Paid up capital |
Net worth |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
|
|
|
|
|
|
|
|
11.
Details of ADRs/GDRs issued on Stock Swap basis for the acquisition under
report:
(a) Number and
Amount of ADRs/GDRs issued for the purpose
:
(b) (i)
Name of the stock exchange on which the ADRs/GDRs are liste :
(ii) Name
of the Issue Manager :
(c) Number of underlying share of the Indian :
company for each ADR/GDR issue
(d) (i) Acquisition price per share of the overseas
(acquired) company
(it) Price
of share recommended by the Invest-
ment Banker
(e) Price of
each underlying share and ADR/GDR of
the Indian company (acquiring
company)
(f) Basis of valuation of price of the share
of the Indian company
(g) Share Exchange Ratio
(Share
price of the acquired company /share price of the acquiring company)
111.
Details of the foreign (acquired) company
(a) Name and
address of the company .......................................
(b)
Name(s) and address of the share holders
of the
acquiring company offering the shares in exchange
(c) Line(s) of activity (activities) of the
company
(d) Financial particulars of the company for
the last 3 years
e , , (Amount in
Foreign Currency1million)
|
Accounting year ended |
Name of Foreign Currency |
Gross Sales Turnover |
Net Profit (Loss) |
Paid up capital |
Net-worth |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
|
|
|
|
|
|
|
(iv) Post‑acquisition
equity structure of Indian company
(acquiring
company) and foreign company (acquired company)
(a) Indian Company (b) Foreign Company
(% of non‑resident holding to total equity) (% of Indian holding to total
equity)
Pre acquisition Post
acquisition Pre acquisition Post acquisition
(v)
Cumulative position of ADRs/GDRs issued for overseas acquisitions under the
scheme
(Amount
in Foreign Currency1million)
|
Sr. No. |
Date of Issue |
Amount of Issue |
Issue price per ADRIGDR |
Amount outstanding |
Name of the foreign company acquired |
Date of report to RBI in form ODG |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
|
1. |
|
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2. |
|
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3. |
|
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|
(vi) Any
other information relevant to the acquisition under report.
It is
certified that the information furnished above is true and correct. It is
further certified that all the legal and other regulatory requirements in India
and the host country of acquisition have been complied with.
Place: (Signature
of authorised official)
Date : STAMP/SEAL Name:
Designation
List of
enclosures
1. 4.
2. 5.
3. 6.
Instructions for filling up the form ODG
(This may
be detached and retained by the Indian company)
1. ODG
form complete in all respects should be submitted in triplicate to the Chief
General Manager, Foreign Exchange Department, Reserve Bank of India, Central
Office, Overseas Investment Division, Amar Building, Mumbai 400 001.
2. The
following documents should be enclosed to this form,
(A) A
statement from the Statutory Auditors of the Indian company certifying that
(i) the Indian Party has
already made an ADR and/or GDR issue and that such ADRs/GDRs are currently
listed on any stock exchange outside India;
Such
investment by the Indian Party does not exceed the higher of the following
amounts, namely:
iii.
amount equivalent of US$ 100 mn. or
iv. amount equivalent to 10
times the export earnings of the Indian Party during the preceding financial
year as reflected in its audited balance‑sheet, inclusive of all
investments made under Regulations in Part I, including under (i) of this
clause, in the same financial year,,
(ii) the issued amount of
the ADRs/GDRs exchanged for acquiring shares of the overseas (acquired) company
is within the limit specified in the Foreign Exchange Management.(Transfer and
Issue of Foreign Security) Regulations, 2000;
(iii) the ADRs and/or GDRs
issued for the purpose of acquisitions are backed by underlying fresh equity
shares of the Indian party;
(iv) after the new ADR
and/or GDR issue, the total holding in the Indian party by persons resident
outside India in the expanded capital base, does not exceed the sectoral cap
prescribed under the relevant regulations for such investments in the
activities in which the Indian party is engaged; and
(v) where the shares of the
foreign (acquired) company are not listed in any stock exchange, its valuation
for acquisition is in accordance with the recommendations of the Investment
Banker
or
where the
shares of the foreign (acquired) company is listed on a stock exchange abroad, the
valuation of its shares is based on current market capitalisation of the
acquired company arrived at on the basis of monthly average price on any stock
exchange abroad for the 3 months preceding the month in which is the
acquisition is committed and over and above, the premium, if any, as
recommended by the Investment Banker in its due diligence report.
(B) Copy of the report together with due
diligence report, if any, from an Investment Banker in supportof the valuation as indicated at above.
(C) Other relevant documents
as submitted to the Stock Exchange/ Regulatory Authorities in the host country
of the company acquired.
Application to Reserve Bank of India for Direct Investment in a Joint Venture/ Wholly Owned Subsidiary Abroad
All
amounts of foreign currency (FCY) &Indian Rupees JNR) should be in
thousands only, i.e., '000 should be omitted ,
For office use only
Date of
Receipt .....................
Inward No.
.....................
GENERAL
1. Brief Particulars of proposed Investment
(t) Financial commitment (in FCY) (ii) Country of location
(iii) Nature of Investment
(A) Investment in a new project (i.e. fresh proposal)
OR
(B) Investment in an existing project (Le
suppitinentary proposal)
Approval
/Identification No.
|
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|
|
Please
indicate 13 digit number issued by RBI
Purpose
of Investment Purpose
of Investment
(a)
Participant in JV (a)
Enhancement of equity of the
existing
JV/WOS
(b) Contribution in WOS (b) Grant of/Enhancement of loan
(c) Full acquisition of a (c)
Extension /Enhancement of
foreign concern Guarantee
(d)
Partial acquisition of (d)
Others (Please specify)
a foreign concern
(e)
Others (please specify)
II. Line
of Activity of the JV/WOS
(Please
tick the relevant box)
(a)
(i) Manufacturing (b) Brief particulars of products to be
manufactured/
(it) Trading goods to be
traded/services to be rendered
(iii) Financial
(iv) Non‑Financial Services ..............................................................
(v) Others (Please specify)
III.
Proposed capital structure of the JV/WOS
(a) Indian Party (ies) % stake (b) Foreign Partner(s) % stake
in equity in equity
PARTICULAR
OF INDIAN PARTY(IES) AND FOREIGN PARTNER(S)
INDICATED
AT A. III ABOVE.
I. Indian Party
(Cases
where there are more than one Indian party, information may be given on
separate sheets for each of the parties)
(i) Name
& Address
............................................................................
(ii) Date
of Incorporation
............................................................................
(iii) Date
of Commencement of Business .......
(iv)
Status *
............................................................................
(v)
Existing Line of Activity ............................................................................
(vi) Years
of experience in the line of Activity
(vii) % of Non‑resident interest in
the share capital of the Indian Party
................................................
*(a)
Public Ltd. Company (1), (b) Private
Limited Company (2),
(c) Public
Sector Undertaking (3), (a) Others (4) (Please specify).
(viii)
Financial particulars of the Indian Party for the last 3 years
|
Accounting |
Domestic |
Foreign exchange |
Foreign |
Net |
Paid- |
Net worth |
|
year |
sales |
earnings from |
exchange |
Profit/(Loss) |
UP |
|
|
|
|
exports (excluding |
earnings |
|
capital |
|
|
|
|
equity exports to |
other than |
|
|
|
|
|
|
existing JVIWOS) |
from exports |
|
|
|
|
|
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
|
|
|
T |
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|
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2. |
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3. |
|
|
|
|
|
|
(ix). Particulars of existing Joint Ventures (JV) and Wholly Owned Subsidiaries (WOS) already in operation or under implementation, of the Indian party and its group concerns and foreign exchange earnings from these concerns:
(Amount in FCY)
|
Sr. |
Name of |
Name of |
Approval No. |
Amount of investment |
||
|
No. |
Indian Party |
JV1WOS1 |
allotted by |
|
||
|
|
|
Country |
Reserve Bank |
Equity |
Loan |
Guarantee |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
|
|
|
|
|
|
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|
|
2. |
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3. |
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|
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4. |
|
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5. |
|
|
|
|
|
|
Total
Repatriations (R) vis‑a‑vis Entitlements
(E) (entitlements & repatriations in the last 3 years to be given in
brackets)
Total non‑equity
of export made so far (figures for last three years to be given in brackets)
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Dividend |
Others |
Projected |
Exports |
Outstanding, |
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exports |
made |
it any |
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(E) (R) |
(E) (R) |
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(8) (9) |
(10) (11) |
(12) |
(13) |
(14) |
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1. |
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2. |
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3. |
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4. |
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5. |
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11.
Particulars of the Foreign Partner(s)/ concern
(To be
filled in case of foreign investment in JVs only. Cases where there are more
than one foreign partner, information may be given on separate sheets for each
of the collaborators)
(a) Name and Address of the foreign
partner/ concern:
(b) Date
of incorporation
(c) Years
of experience in the proposed field of collaboration
(d) Financial particulars of the
foreign partner/concern during the last 3 years:
(Amount in FCY)
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Accounting Year ending |
Sales |
Net profits(loss) |
Paid‑up Capital |
Net worth |
Dividend % |
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(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(To be
filled in case of supplementary proposals only)
1. Date of latest Annual Performance Report (APR)
submitted to Reserve Bank
D D M M Y Y Y Y
II. Date of Incorporation III.
Date of commencement of business
D D M M Y Y Y Y D
D M M Y Y Y Y
IV. Capital
structure of the JV/WOS
(Amount in FCY).
(a)
Indian Equity
Approved age to Actual % age to
amount investment total equity
total
equity
(i) (ii) (iii) (iv)
(b) Mode
of Indian equity investment
(i) Cash Remittance
(it) Capitalisation of
(a) Exports of Plant
& Machinery/goods
(b) Others (Please specify)
(iii) GDR/ADR proceeds
(iv) Swap of shares
(v) Bonus shares
(vi) Out of EEFC balances
(vii) Others (please specify)
Total:
(c) Foreign equity: (t) Amount (it) %96 to total equity
V. (a) Position of
Term Loan (TL)/Working Capital (WC) Loan availed of by JV/WOS
(Amount in FCY)
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Amount |
Outstanding |
Overdue amount, if any |
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approved |
amount |
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Total |
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TL |
I'VC |
TL |
WC |
TL |
WC |
TL |
+ WC |
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(i) From Indian Party |
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(ii) From foreign partner |
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(iii) From Indian
banks/financial |
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institutions |
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(iv) Others |
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(Please specify) |
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Total: |
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(b)
Position of guarantees extended to JV/WOS
(Amount in ICY)
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Amount of |
Amount |
Date of |
Amount |
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guarantee |
invoked |
Invocation |
paid so |
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approved |
claimed |
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far |
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extended |
any) |
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(t) By Indian Party |
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(it) By foreign party |
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(iii) By banks/financial
institutions in India |
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(iv) By banks/financial
institutions outside |
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India |
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(v) Others (Please specify) |
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VI.
Operational details of the JV/WOS for the last three years (Amount in FCY)
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(Year ended) (1) |
(Year ended) (2) |
(Year ended) (3) |
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(i) Gross Sales/Turnover |
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(ii) Net Profit/(Loss) |
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(iii) Dividend |
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(iv) Net Worth |
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VIL
Entitlements(E) and Repatriation (R) from the JV/WOS
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(During the last |
(Since commence- |
(Total out- |
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year ended) |
ment Of |
standing |
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business) |
entitlement due |
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for repatriation) |
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(i) Dividend |
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(it) Others* (Please specify) |
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(iii) Non-equity exports
realised |
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(iv) FDI Inflows |
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*(Royalties,
technical know‑how fees, consultancy fees, etc.)
Vill. Present proposal in brief with supporting
reasons:
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
(If the
project is to be implemented in phases, separate sheets showing phase‑wise
distribution of cost should be attached and only the total of all the phases
should be indicated below)
1. Rate of exchange applied for the
projections.
I US $ ‑ INR
FCY Units ‑ US $ (Amount
in FCY)
2. Estimated cost of the project
(i) Cost of capital
equipment.
(ii) Cost of land
(iii) Cost of civil
works
(iii) Cost of misc.
fixed assets
(v) Preliminary &
preoperative expenses
(vi) Contingencies
(vii) Others (Please
specify)
Total:
'In case of
supplementary proposals, the revised cost of the project may be indicated.
III.
Financing of the estimated project cost:
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Equity |
Term loan (TL) Working Capital
(WC) |
Guarantee |
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Amount |
% age to |
Amount period Rate |
Amount |
Period |
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(A) By Indian Party(iies) |
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(i) |
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(ii) |
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(iii) |
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Sub-Total |
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(B) By Foreign Partners |
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(i) |
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(ii) |
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(iii) |
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Sub-Total |
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C) By Banks/Fls/others |
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(i) |
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(ii) |
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(iii) |
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(Equity
share capital plus term loan above should be equal to the total cost of the
project as at 11 above.)
IV. Method
of Investment (Amount
in FCY)
(a) By the Indian party
(i) Cash remittance
(ii) Capitalisation of
(A)
Export of plant & machinery/goods
(B)
Others (Please specify)
(iii) ADRs/GDRs raised
abroad
(iv) Swap of shares
(v) Others (Please
specify)
Total
(b) By the foreign partner
(i) Cash
(ii) Fixed
assets
(ii)
Loans
(iii)
Others (Please specify)
Total
(c)
Funding of Indian investment
(i) Self‑generated
funds
(ii) Assistance
under Overseas Investment Finance Scheme of the EXIM Bank, if applicable
(iii)
Resources raised through ADRs/GDRs
(iv)
Loans from banks/financial
institutions
(v) Out
of balance in EFFC Account
(vi)
Swap of shares
(vii)
Others (Please specify)
Total
V. Management of the
foreign concern. (Whether the Indian party will have management control? If
yes, give brief particulars of management /managerial functions to be
discharged by the Indian party).
1.
Profitability Projections: (Amount
in FCY)
Years of
operation
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1 |
2 |
3 |
4 |
5 |
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(a) |
Gross sales/turnover |
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(b) |
Operating cost excluding
depreciation and interest |
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(c) |
Depreciation |
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(d) |
Interest |
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(i) On term loans |
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(ii) On Working Capital loans |
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(e) |
Tax |
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(f) |
(Net Profit)/(Loss) |
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(g) |
Dividend |
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(h) |
Transfer to reserves |
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® |
Accumulated reserves &
surplus/ (loss) |
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(1) |
Net-worth |
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II.
Repatriable entitlements of Indian Party, net of host country tax, during the
next 5 years of operation
(Amount in FCY)
Years of
operation
|
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1 |
2 |
3 |
4 |
5 |
Total |
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(u) Dividend |
|
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|
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(b) Technical know-how fees |
|
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(c) Royalty |
|
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(a) Engineeiing/Technical
services fees |
|
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(e) Consultancv/Management fees |
|
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(h Selling agency commission |
|
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(g) Others (Pleasa~ specify) |
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-Total |
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Ill. Projected for non‑equity/incremental
exports
|
|
1 |
2 |
3 |
4 |
5 |
Total |
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FOB Value
Years of
operation
(Amount in
INR)
IV, (a) Whether the
applicant party/ies, it, promoters, directors, etc. have Come Linder
investigations by Enforcement Directorate. If yes, the brief details thereof
including present stage of investigation/ adjudication/ manner of disposal of
the case should be furnished.
(b) Whether the promoter Indian party/ies
is/are presently on the Exporters 'Caution ‑list of RBI for non-realisation
of export proceeds. If so, the present position may be indicated,
V. Any other information
relevant to this proposal, including any special benefits/incentives available
in the host country for setting up/acquiring the proposed concern:
VI. Name and address,
telephone, telex and fax numbers of the branch of the authorised dealer through
whom remittance towards the investment will be made.
I/We
hereby certify that the information furnished above are true and correct,
Place: (Signature
of authorised official)
Date : STAMP/SEAL Name:
Designation
List of
enclosures
1. 4.
2. 5.
3. 6.
(This part
should be detached and retained by the applicant) 'i
1. Application
complete in all respects should be submitted in three sets together with the
following documents to the Chief General Manager, Reserve Bank of India,
Foreign Exchange Department, Central Office, Overseas Investment Division
(011)), Amar Building, Mumbai ‑ 400001 :
(a) Draft Joint Venture
Agreement (or Memorandum & Articles of Association in the case of a wholly
Owned Subsidiary) specifying the equity structure, management, rights and
responsibilities of shareholders and also draft agreement(s) for supply of
technical know‑how, management and other services, if applicable.
(b) A detailed
project/feasibility report incorporating, inter alia, projected funds flow
statement and balance sheets for five years, the information on various
leverage and or profitability ratios like debt‑equity ratio, debt service
coverage ratio, return on investments, etc. of the foreign concern accompanied
by the statement from a Chartered Accountant certifying the ratios and
projections, given in the application/ report.
(d) A report from the bankers of the Indian
party in seated/closed cover.
(e) The latest Annual
Accounts, Le. Balance Sheet and Profit and Loss Account along with the
Directors' Report of the Indian party and of the foreign collaborator in case
of a joint venture.
(f) Additional documents as under, if the
application is made for partial/full take over of an existing foreign concern:
(i) A copy of the certificate of
incorporation of the foreign concern;
(ii) Latest Annual
Accounts, Le. the Balance Sheet and Profit and Loss Account along with
Directors' report of the foreign concern ; and
(iii) A copy of the share valuation
certificate from
(i) where the investment is
more than US $ 5 (five) million, by a Category I Merchant Banker registered with SEBI or an Investment
Banker/Merchant Banker registered with the appropriate regulatory authority in
the host country; and
(ii) in all other cases, by a Chartered
Accountant or a Certified Public Accountant.
(g) A report from the bankers of the Indian
party in sealed/closed cover.
(h) The latest Annual
Accounts, ie. Balance Sheet and Profit
and Loss Account along with the Directors' Report of the Indian party and of
the foreign collaborator in case of a joint venture.
(i) A copy of the resolution of the Board
of Directors of the Indian party/(ics) approving the proposed investment.
(j) Where investment is in
the financial services sector, a certificate from a Charter ed Accountant
/Auditor's firm to the effect that the Indian Party :
(i) has earned a net profit during (he
preceding three years from the financial services activity;
(ii) is registered with the appropriate
regulatory authorities;
(iii) has a minimum net‑worth
(paid‑up capital and free reserves) of not less than Rs. 15 crones as on
the date of last audited balance sheet; and
(iv) has fulfilled the
prudential norms t elating to capital adequacy as prescribed by the concerned
regulatory authority in India.
2. Where there are more than one Indian
promoter of the JV/WOS, only one application should be submitted on behalf of
all the promoters
3. (a) In case an Indian party is seeking
approval for acquisition of overseas concern through bidding/tender procedure
(with/without remittance of any earnest money deposit (FMD)/issue of bid bond
guarantee), Indian Party should approach the Reserve Bank at least one month in
advance from the last date for submission of bid to the overseas authority with
the following documents
(i) application in Form ODI, to the extent
applicable;
(ii) certified relevant extracts of the
terms and conditions of bid;
(iii) Chartered Accountant's
certificate indicating the valuation of shares and assets of the overseas
concern justifying the acquisition price, where applicable; and
(iv) a project/feasibility report.
(b) In the
case where the bid is won by the Indian Party but the terms and conditions of
the acquisition are different from those furnished earlier to the Reserve Bank,
the Indian Party should apply afresh to the Reserve Bank in Form ODI for prior
approval before putting through the transaction.